Astral 50 years on:
who knew it would come to this?

Reproduced courtesy of Broadcast Dialogue, November 2011

Fifty years ago, the Greenberg brothers opened a couple of photo developing kiosks in Montreal Miracle Mart grocery stores. Today, Ian Greenberg runs Astral, a private broadcaster that operates four score and more radio stations plus almost two-dozen TV channels. How did Angreen Photo evolve to Astral, one of the largest media companies in Canada?

Astral's journey has been a remarkable zigzag of interests, a winding trail that has taken Astral into the ownership of 83 radio stations in eight provinces (50 markets), 23 English- and French-language pay and specialty channels, an outdoor advertising operation in Quebec, Ontario and British Columbia, plus digital media—and the company employs roughly 2,800 people.

A bit of history:

• In 1961, Angreen Photo operated photography concessions at two Montreal grocery stores.
• In 1967 those kiosks expanded to become a 125-store chain called Astral Photo.
• Later, when Astral Photo acquired the Pathé-Humphries motion picture lab, the name was changed yet again this time to Astral Bellevue Pathé.
• In 1973, under the name Astral Bellevue Pathé, Astral produced or executive-produced more than 100 feature films and TV programs/TV miniseries.
• In 1983, the Greenbergs acquired control of First Choice (now The Movie Network) and Premier Choix TVEC (now Super Écran). It was at that same time when Astral stopped its direct involvement in production. In that same period, the company changed its name to Astral Communications.
• In 1995, Astral decided to focus exclusively on media and divest two-thirds of its assets.
• In 2000, another name change, this time to Astral Media Inc.
• In 2000, Astral bought Radiomutuel, which also owned a controlling share of an outdoor advertising firm as well as several French-language specialty channels.
• In 2002, it bought Telemedia's radio properties in Quebec and the rest of Canada, then sold the Quebec stations to Corus Entertainment.
• In 2007, Astral Media bought Standard Radio.
• And, in the spring of 2010, it made the most recent name change this time to simply Astral, with all references to Media removed. But that's only for branding purposes. Astral Media Inc. remains the company's official name.

In 2011, in an address to the Canadian Club of Montreal, Astral Media President/CEO Ian Greenberg discussed the business of culture in a culture-driven business. In fiscal 2011, which ended August 31, Greenberg noted that Astral had recorded 60 consecutive quarters of profitable growth—15 years worth! And fiscal 2011 marked the first time that Astral surpassed the billion dollar revenue mark.

A core element of the company's business culture, he said, has been to continually challenge itself and, when necessary, to have the determination to take big bets that, over the years, "would significantly change the face of the company".

One of those many decisions—one for which Greenberg takes great pride—was in keeping Astral headquarters in Montreal despite significant pressure: "... our response was always the same: Astral was founded in Montreal and has deep roots in Montreal and we are here to stay. "The decision was astute, as it relates to the business of culture. Said Greenberg: "... it has certainly helped us to get more out of the great linguistic duality and cultural diversity of our great country. In addition, Montreal has evolved over the years into a cultural metropolis offering a dynamic showcase for the arts, music and entertainment."

He ascribes strategic balance as another key business culture component and a factor in Astral's financial success: Strategic balance between advertising revenues and television subscription revenues; between regions across the country; between media platforms; and a balance between organic- and acquisition-driven growth. All, he said, supports growth. "Balance in our view has been and continues to be a powerful risk-mitigating strategy and growth-management approach. Through good and more difficult times, Astral has been able to deliver sustained growth as a direct result of this overall balanced approach."

The third key business culture success factor is how Astral develops and nurtures business partnerships. "From the outset, we have invested time and effort to develop strong relationships with Hollywood studios, independent television and movie producers and some of the best global media operators. "Over time, these relationships have grown into fruitful partnerships that rest solidly on mutual trust, integrity, and common vision and objectives. These partnerships have been a building block of Astral's business as they add significant value, breadth and depth to our portfolio."

In television, Greenberg said Astral has long-term agreements in place with the largest U.S. movie studios. It also has a long-standing collaboration with Disney and a similarly strong long-term relationship with HBO. Astral's radio properties have partnered, in branding and programming agreements, with Richard Branson's Virgin Radio and France's Groupe NRJ. Greenberg stressed that Canada's television broadcasting industry has been gradually built over the years thanks to a finely established equilibrium of rights and obligations for all industry players. "Through clear, predictable and consumer focussed rules, our regulators created the conditions for the emergence of a highly entrepreneurial sector, as well as a vibrant industry and economic growth driver. More importantly, the CRTC paved the way for the development of a broadly diversified and content-rich television offering. "What regulators also understood a long time ago is the importance, both from a cultural identity and economic standpoint, that programming, production and broadcasting activities remain fully Canadian. It is the only way we can ensure that our television sets reflect the values we share as Canadians." The Government of Canada, he said, recognizes the importance of protecting an industry that encourages the production and availability of Canadian content that reflects Canadian culture and values.

Greenberg's remarks came before the recent CRTC decision regarding over-the-top (OTT) online and unregulated video services such as Netflix, AppleTV and Google TV. "These services," he said, "compete directly with Video on Demand, Subscription Video on Demand and Pay-TV services operated by Canadian media companies." While he was adamant that Astral is in favour of fair competition, it is against foreign Internet broadcasting competitors which "reap the benefits and revenues of doing business in this country yet are not subject to the same rules of engagement as Canadian companies. "Further, he noted, such companies make no contribution to Canadian employment nor do they pay Canadian taxes.Greenberg called for the CRTC and the federal government to ensure that the rules underpinning the broadcast system puts all broadcasters—TV or Internet-based—on a level-playing field that best services the interests of Canadian consumers and Canadian economy.

(Editor's note: Greenberg's appeal was not heard. The CRTC surprised many observers by concluding that while there was lots of negative rhetoric about unregulated OTT services, there was nothing pointing to real harm. Instead, the Commission decided to revisit the issue in 2012.)